Day 3 Government Shutdown Update: FDA, USDA, and Imports

As the federal government shutdown enters its third day, the regulatory and trade impacts are deepening. While essential food safety, public health, and customs functions continue, clients should be aware of additional service suspensions and operational slowdowns now taking effect across FDA, USDA, and U.S. import operations.

FDA: Retained Functions, Shrinking Scope

• User-fee submissions remain halted: FDA continues to confirm it cannot accept new drug, biologic, device, or animal drug applications requiring user-fee payments. Only applications already filed and fully paid are advancing under carryover funding.
• Workforce under strain: Although initial plans indicated 86% of staff retained, reports now note furloughs reaching ~14% of the workforce. This is reducing FDA’s ability to sustain certain functions, particularly outbreak coordination and broader compliance oversight.
• Food safety surveillance gaps: Some reports indicate outbreak investigations and data updates have been suspended or delayed, which could complicate industry response to foodborne illness events.
• Imports under review, but slower: Entry screening and high-risk import exams remain active; however, staffing constraints are leading to slower clearance times and growing backlogs at ports.

USDA: Payments, Data, and Inspections

• Program payments suspended: Farm program, conservation, and disaster relief payments remain frozen, creating cash-flow issues for producers.
• Data releases delayed: USDA’s National Agricultural Statistics Service (NASS) and other statistical offices are suspending regular market reports, including export sales and crop data. This leaves producers, traders, and manufacturers without key market intelligence.
• Furlough scale: Approximately 42,000 USDA employees are furloughed, underscoring the breadth of the disruption.
• Animal Welfare Act inspections paused: Routine inspections of licensed facilities are suspended, leaving a regulatory gap for breeders, exhibitors, and research operations.
• Essential inspections continue: USDA’s Food Safety and Inspection Service (FSIS) is maintaining inspection of meat, poultry, and egg products as critical services. APHIS continues user-fee–funded import/export permitting and emergency animal/plant health programs.

Imports & Trade: Backlogs and Delays

• CBP functions continue: U.S. Customs and Border Protection remains operational, processing cargo and collecting tariffs as essential services.
• Partner government agency (PGA) delays: FDA and USDA APHIS clearances are slowing, leading to bottlenecks where multiple agencies must review shipments. Importers should expect longer release timelines, particularly for food, feed, and agricultural commodities.
• Industry advisories: Logistics trade publications now recommend adding multiple days of lead time for FDA-regulated imports and closely monitoring port-specific conditions.

Practical Considerations for Industry

As the shutdown continues, companies should:

• Plan for regulatory delays: Adjust submission timelines, product launches, and import schedules with built-in buffers.
• Anticipate data gaps: Be prepared to operate without USDA market reports and other routine statistical updates.
• Review compliance exposure: With reduced FDA and USDA oversight, some facilities may see deferred inspections, but enforcement can resume quickly once funding is restored.
• Maintain close broker and counsel communication: Coordination across FDA, USDA, and CBP clearances is essential to avoid unnecessary holds and delays.

Outlook

Each additional day of the shutdown amplifies the regulatory and commercial risks, particularly as backlogs accumulate and data gaps widen. Congress is debating continuing resolutions, but until appropriations resume, companies should assume service suspensions will persist and prepare accordingly.

We will continue to monitor agency communications and industry reports daily to advise clients on navigating these challenges.